In risks and threats and unchangeable environment measures, the CEO’s must be • Quick effective decision maker • Adapt to the environment as soon as possible • Take all kind of measures • Take employees in confidence • Engage employees in risks • Ensure a priority on customers and staff alike. • Train your employees for crisis situation
Answers
1/2 REMAINING REGISTER
Harvard Business Review Home
Sign In
Nuttapol Noprujikul/Dreamstime
LEADERSHIP TRANSITIONS
What Sets Successful CEOs Apart
by Elena Lytkina Botelho , Kim Rosenkoetter Powell , Stephen Kincaid and Dina Wang
From the May–June 2017 Issue
Save Share 8.95
The chief executive role is a tough one to fill. From 2000 to 2013, about a quarter of the CEO departures in the Fortune 500 were involuntary, according to the Conference Board. The fallout from these dismissals can be staggering: Forced turnover at the top costs shareholders an estimated $112 billion in lost market value annually, a 2014 PwC study of the world’s 2,500 largest companies showed. Those figures are discouraging for directors who have the hard task of anointing CEOs—and daunting to any leader aspiring to the C-suite. Clearly, many otherwise capable leaders and boards are getting something wrong. The question is, what?
In the more than two decades we’ve spent advising boards, investors, and chief executives themselves on CEO transitions, we have seen a fundamental disconnect between what boards think makes for an ideal CEO and what actually leads to high performance. That disconnect starts with an unrealistic yet pervasive stereotype, which is shaped in large part by the official bios of Fortune 500 leaders. It holds that a successful CEO is a charismatic six-foot-tall white man with a degree from a top university, who is a strategic visionary with a seemingly direct-to-the-top career path and the ability to make perfect decisions under pressure.
Yet we’ve been struck by how few of the successful leaders we’ve encountered fit this profile. That realization led us to embark on a 10-year study, the CEO Genome Project. Its goal is to identify the specific attributes that differentiate high-performing CEOs (whom we define as executives meeting or exceeding expectations in the role, according to interviews with board members and majority investors deeply familiar with the CEOs’ performance). Partnering with economists at the University of Chicago and Copenhagen Business School and with analysts at SAS Inc., we tapped into a database created by our leadership advisory firm, ghSmart, containing more than 17,000 assessments of C-suite executives, including 2,000 CEOs. The database has in-depth information on each leader’s career history, business results, and behavioral patterns. We sifted through that information, looking for what distinguished candidates who got hired as CEOs from those who didn’t, and those who excelled in the role from those who underperformed.